The U.S. Small Business Administration issued a one-page application form that aims to simplify the process of applying for the forgiveness of Paycheck Protection Program loans, along with newly revised and updated forms to comply with the latest stimulus legislation.
Congress approved the COVID-19 relief package last month, which offered $284 billion in funding for small-scale businesses who needed loans. The funds were used to offset the economic impact of the coronavirus epidemic. The law required that the SBA provide simplified forms within the first 24 hours after the bill’s passage into law. This was to make it easier to apply for forgiveness. It also included conditions that encourage banks in the community to lend more particularly to minority-owned businesses who had a difficult time getting loans last year.
“The Small Business Administration met the requirement of releasing the single-page form for PPP loan forgiveness within 24 days of the date of enactment of the Consolidated Appropriations Act, 2021,” wrote Ed Zollars, a partner at Thomas, Zollars & Lynch CPAs on his Current Federal Tax Developments blog for Kaplan Financial Education. “The agency also released new forms that were updated.”
First Draw PPP Terms of loan forgiveness
Irs Student Loan Forgiveness Program – First Draw PPP loans made to eligible borrowers qualify for full loan forgiveness if within the 8 to 24 week period that follows the loan’s disbursement
- The same goes for the employee compensation and the.
- The loan funds are used on payroll costs and other eligible expenses; and
- At least 60% of profits are used for the cost of payroll
Second Draw PPP Conditions for loan forgiveness
Second Draw PPP loans to eligible borrowers can be eligible for loan forgiveness when the loan is paid within an 8– 24 week time frame.
- Pay and worker levels are maintained in the same manner in accordance with the First Draw PPP loan
- The loan funds are used on payroll expenses as well as other eligible expenses and
- At least 60% of funds go to payroll costs
- What is the best time to apply for loan forgiveness?
A borrower may apply for forgiveness once all loan proceeds for which the borrower is requesting forgiveness have been utilized. Borrowers are able to apply for forgiveness at any time prior to the maturity date of the loan. Borrowers who do not request forgiveness within 10 months of the expiration date of the loan will be able to receive the loan payment from their PPP lender.